In a judgment delivered on April 8, 2025, the Supreme Court affirmed the liability of an insurance company to compensate victims of a motor accident and granted it the right to recover the amount from the vehicle owner, owing to the driver’s lack of endorsement as mandated under Rule 9 of the Central Motor Vehicles Rules, 1989, for driving a vehicle transporting hazardous goods. The judgment was delivered by Justice Sudhanshu Dhulia and Justice K. Vinod Chandran.
Background
The appeals were filed by M/s. Chatha Service Station, the owner of an oil tanker involved in a fatal accident, against the orders of the Punjab and Haryana High Court. The High Court had upheld the Motor Accidents Claims Tribunal’s direction that the insurance company pay the compensation to the families of two deceased persons—a bicyclist and a pedestrian—and recover the same from the owner of the offending vehicle. The driver did not possess the required endorsement to drive a vehicle carrying dangerous or hazardous goods.
The Tribunal found negligence on the part of the driver based on the FIR (Ext. C1), charge sheet (Ext. C3), and deposition of CW2, an eyewitness. The quantum of compensation was not contested. The only issue raised before the Supreme Court was the legality of the “pay and recover” direction issued against the insurance company.
Arguments of the Parties
The appellant contended that:
- There was no evidence the accident occurred due to the hazardous nature of the goods.
- At the time of the accident, the vehicle was allegedly not carrying any hazardous goods.
- A certificate produced during the appellate stage indicated that the driver had completed the required training.
The insurance company countered that:
- The driver admitted he lacked the required endorsement under Rule 9.
- He also admitted the tanker was carrying oil at the time of the accident.
- The certificate was inadmissible under Order 41 Rule 27 of the Civil Procedure Code as it was produced for the first time on appeal without any explanation.
Court’s Analysis
The Court observed that under Rule 9 of the Central Motor Vehicles Rules, 1989, a driver of a vehicle carrying hazardous goods must:
“…in addition to being the holder of a driving licence to drive a transport vehicle, also have the ability to read and write at least one Indian language specified in the VIIIth Schedule of the Constitution of India and English and also possess a certificate of having successfully passed a course…“
The Court emphasized that the syllabus under Rule 9 includes advanced driving skills and defensive driving, not merely emergency response procedures. It held:
“We cannot find the absence of such endorsement of the training course having been undertaken to be a venial breach, not absolving the Insurance Company of its liability.”
The Court distinguished earlier High Court decisions that viewed the lack of endorsement as non-fundamental. It noted that Rule 9 training is essential for handling vehicles specifically designed for transporting hazardous goods. Since the vehicle was carrying oil at the time of the accident, the absence of the endorsement was not a mere technicality.
The Supreme Court also addressed the applicability of National Insurance Co. Ltd vs. Swaran Singh [(2004) 3 SCC 297], reiterating that:
“…a decision has to be taken whether the fact of the driver possessing licence for one type of vehicle but found driving another type of vehicle, was the main or contributory cause of accident.”
In this case, the accident was attributed to rash and negligent driving by a person not authorised to drive the tanker, making the lack of endorsement material to the incident.
Regarding the certificate produced during appeal, the Court found no justification for its non-production at the trial stage and stated:
“This raises genuine suspicion on the veracity of the certificate… There is no serial number… nor is there a round seal of the institution which issued the certificate affixed.“
Decision
The Supreme Court dismissed the appeals and upheld the High Court’s direction:
“We find absolutely no reason to entertain the appeals and dismiss the same affirming the direction to the insurance company to pay the amounts to the claimants and recover it from the owner of the oil-tanker.”
Civil Appeal Nos. 25789–25792 of 2019 |
M/s. Chatha Service Station vs Lal Mati Devi & Ors.
